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CapitalPress.com
August 31, 2018
Dairy/Livestock
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Oregon leaders visit organic creamery
Butter, milk powder
production facility
opened in 2017
By GEORGE PLAVEN
Capital Press
McMINNVILLE,
Ore.
— Sitting face-to-face with
organic dairy farmers from
around the Willamette Val-
ley, Oregon Gov. Kate Brown
and U.S. Sen. Jeff Merkley
pledged their support for or-
ganic agriculture, an industry
that Merkley called “an excit-
ing opportunity for our food
and our economy.”
Brown and Merkley, both
Democrats, visited the Or-
ganic Valley creamery in Mc-
Minnville on Friday, one year
to the month after the plant
opened with $350,000 in
funding from the state’s Stra-
tegic Reserve Fund.
The creamery now has
42 full-time employees and
brings in 500,000 pounds of
organic milk every day to pro-
cess into butter and powdered
milk. Organic Valley is the na-
tion’s largest organic farming
cooperative, with more than
2,000 members in 35 states
— including 75 organic dairy
farms in Oregon and Wash-
George Plaven/Capital Press
Oregon Gov. Kate Brown and U.S. Sen. Jeff Merkley visited the Organic Valley creamery in McMinn-
ville on Friday, including a brief tour with plant manager Scott Fields.
ington state.
One of those members is
Sar-Ben Farms in Saint Paul.
Steve Pierson, a fourth-gen-
eration family farmer, also
serves on the Organic Valley
board of directors. He talked
about the process of going
organic, shifting from a con-
fined feeding operation to a
grass-based operation, which
helped to improve the health
of his cows.
“We felt that herd should
have been healthier,” Pierson
said, and though it was intimi-
dating to change their produc-
tion model, “We found that
working with Mother Nature,
instead of against it, was real-
ly better for us.”
Pierson’s daughter Sara,
22, will become the fifth gen-
eration, along with her broth-
ers, to work at Sar-Ben Farms.
While Sara Pierson said she
originally thought she might
be interested in a more tradi-
tional 9-to-5 job, she ultimate-
ly missed the fast-paced work.
Roller coaster ride continues in dairy market
By LEE MIELKE
For the Capital Press
The roller coaster was
alive and well at the CME
last week. The Cheddar
blocks fell to $1.61 per pound
Monday but closed Friday at
$1.67, up 1 1/2-cents on the
week and 2 cents above a
year ago.
The barrels fell to $1.5650
Wednesday but closed Fri-
day at $1.60, down 7 cents
on the week and 4 1/4-cents
above a year ago.
The cheese blocks lost
1 3/4-cents Monday, then re-
gained 1 1/2-cents Tuesday,
hitting $1.6675. The barrels
were up a penny Monday
and stayed there Tuesday at
$1.61.
Demand reports through-
out August have been sim-
ilar, according to Dairy
Market News. Mozzarella,
provolone and curd orders
have been strong or strength-
ening, while Cheddar/spe-
Dairy
Markets
Lee Mielke
cialty producers have seen
slowdowns. Orders last
week were steady to stron-
ger across the board. Pizza
cheesemakers are citing new
and returning college stu-
dents as a factor in the con-
tinued demand upticks.
While milk production
has eased somewhat in the
West and Class I demand has
increased, cheese production
remains steady and in line
with seasonal norms.
Cheese orders from the
food service sector have
somewhat increased as
pizza processing is taking
more cheese than usual. But
stocks remain profuse for
many varieties of cheese.
Cheese marketers continue
to report that U.S. cheese is
facing strong competition in
“I really love the way I
grew up on the farm,” Pierson
said. “I don’t think I could
have an office job.”
Organic Valley has been a
key partner in helping those
dairy farms remain in busi-
ness, cutting $59 million in
milk checks for Oregon mem-
bers in 2017. The McMinn-
ville creamery is the co-op’s
only brick-and-mortar facility
outside Wisconsin.
Brown said she was
pleased to see the cream-
ery has created new jobs in
the community, and will be
talking with Department of
Agriculture Director Alexis
Taylor about programs to sup-
port further growth in organic
farming.
Getting into the organic
business is no easy task. For
dairy farmers, cows can only
eat organic feed, cannot be
given any additional hormones
or antibiotics, and must have at
least 120 days to graze on open
pasture.
For farmers growing their
own feed, it takes three years
without spraying chemicals
before the land can be certified
organic.
Pierson said organic farm-
ers must maintain consumer
trust and credibility, which
is why they are willing to
work with lawmakers on new
guidelines and regulations.
“It’s all about integrity,
really,” he said. “We need to
meet that (customer) expecta-
tion.”
Adam Warthesen, who
heads government relations
for Organic Valley, said the
co-op feels “pretty good”
about where organics stand in
the 2018 Farm Bill, which is
scheduled to go to conference
committee Sept. 5.
Merkley, the ranking
Democrat on the Senate Ag-
riculture Appropriations Sub-
committee, pointed to several
provisions in the Senate’s
version of the Farm Bill in-
tended to invest in organics
— such as creating perma-
nent mandatory funding for
organic research, provid-
ing mandatory funding for
cost-share programs to help
farmers transition to organic
practices, and strengthening
enforcement tools under the
USDA National Organic Pro-
gram to protect against fraud-
ulent imports.
Last year, the USDA Of-
fice of Inspector General is-
sued an audit claiming that
the agency could not provide
reasonable assurance that the
National Organic Program
required documents at U.S.
ports to verify that labeled or-
ganic products, in fact, came
from organic sources.
Chris Schreiner, executive
director of Oregon Tilth, a
nonprofit organization accred-
ited to certify organic farms,
said that report served as a
call to action.
“The organic label rests
on consumer credibility and
trust,” Schreiner said. “It’s
really our job as certifiers to
make sure that integrity is
there.”
July milk production up just 0.4 percent
international markets. None-
theless, industry players are
hopeful that sales opportuni-
ties both in the international
and domestic markets will
become available and help
keep inventories in check.
Spot butter dipped to
$2.2375 per pound last Tues-
day, only to close Friday at
$2.26, still down 4 1/2-cents
on the week and 36 3/4-cents
below a year ago.
Monday’s butter jumped
3 1/2-cents and inched up a
half-cent Tuesday, to $2.30.
Churn activity increased
last week in the Midwest,
while some south-central
butter plants were holding
off. Cream prices have be-
come more approachable for
butter producers since their
peak, says DMN, and cream
rates are in a fairly sharp
downturn, as school bottling
has put more milkfat back on
the market.
Retail sales remain
healthy.
By CAROL RYAN DUMAS
20
Capital Press
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Heat and humidity took a
toll on milk production in July
in some parts of the country,
adding to the dampening pro-
duction growth driven by low
milk prices.
Milk production was down
year over year in 11 of the 23
states in USDA National Ag-
ricultural Statistics Service’s
monthly report.
Cow numbers were also
below year-ago levels in 13
of the states, and milk pro-
duction per cow was down in
eight of the states.
Nationwide
production
was up just 0.4 percent in July
year over year, and produc-
tion per cow was up just 0.5
percent. Cow numbers were
down 8,000 head from both
June and year-earlier levels.
Top dairy state California
had 12,000 fewer head than a
year earlier, and the heat took
35 pounds out of per-cow pro-
duction year over year. Milk
production was down 2.5 per-
cent in July from year-earlier
levels.
Milk prices have been
lackluster all year, but the
Class III price lost $1.11 per
hundredweight from June to
July and sank to $14.10.
Producers’ mailbox checks
are well under cost of produc-
tion, and dairy cow slaugh-
ter was 4.9 percent higher
year over year from January
through June.
“It appears dairy prices
may have overreacted late
June and early July to re-
taliatory tariffs to be imple-
mented about mid-July by
Mexico, China and Canada,”
Bob Cropp, a University of
Wisconsin economist, said in
his latest Dairy Situation and
Outlook Report.
But dairy product pric-
es have recovered some in
Federal order Class III milk prices
$16.77
$16.88
$13.40
15
$14.10: Down
16.5% from
Nov. 2017
(Dollars per hundredweight)
Source: USDA Agricultural Marketing Service
Carol Ryan Dumas and Alan Kenaga/Capital Press
10
J
F M A M J J
2017
A S O N D
Capital Press File
Cows feed at a dairy near
Kuna, Idaho. Fewer cows along
with heat, humidity and unap-
petizing milk prices, slowed the
growth in U.S. milk production
in July.
August. The August Class
III price should improve to
around $15. The Class IV
price, which fell to $14.14
in July, should strengthen to
around $14.70 he said.
“The major factor for im-
proved dairy product prices
and milk prices is milk pro-
duction,” he said.
Milk cow numbers in the
U.S. could fall further with
milk production per cow im-
proving with cooler weather
by October. The growth in
J
F M A M J
2018
J
U.S. milk production could
stay at 1 percent or less, which
would be positive for prices,”
he said.
The EU is experiencing
some severe drought, which
has reduced crop production
and increased feed costs. New
Zealand might see some re-
covery in milk production, but
it’s only projected to increase
2 percent.
“So the growth in world
milk production is likely to
be lower, resulting in world
milk prices staying relatively
strong,” he said.
U.S. dairy exports have
been a positive factor for milk
prices, but the uncertainty is
how they will do for the re-
mainder of the year now that
the retaliatory tariffs are in ef-
fect, he said.
U.S. milk prices for the
remainder of the year are also
uncertain. But Class III could
improve to the high $15s and
even touch $16, and Class IV
is likely to be in the $15s, he
said.
Last week, USDA’s Eco-
nomic Research Service fore-
cast a Class III of $14.50 to
$14.70 for 2018 and $14.95 to
$15.95 for 2019.
The agency’s forecast for
the Class IV price is $13.95-
14.25 for 2018 and $13.75 to
$14.85 for 2019.
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thank our sponsors for a successful
2018 Winter Meeting and Summer Tour.
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